Toyota USA President Hints At HD Tundra’s Future
In Automotive News, Toyota USA President Yoshi Inaba answered some questions about Toyota, including offering some interesting tidbits about the Tundra. From Automotive News (subs. req’d):
Question: Why is the Tundra having only limited success against Detroit’s full-sized pickups?
Inaba’s Answer: Let’s face it. Tundra competes in a subsegment of full-sized pickups. It does pretty good. The simple situation is with the market collapsing and fuel prices going up, it hinders us from being more aggressive and not reaching the volume where we bounce from there. We are not disappointed. We are not 100% happy, but we are not discouraged.
Here’s what I think these comments mean.
1. Toyota isn’t giving up on the full-size truck segment. While this isn’t really a surprise – Toyota invested in the second generation Tundra with the same number of annual sales they’ve got now – it’s always nice to hear a senior Japanese executive express a commitment to the product.
2. Ford, GM, and Chrysler-Fiat have a cost advantage. To me, Inaba’s comment that “Tundra competes in a subsegment of full-sized pickups” seems like a subtle hint to the fact that all Ford, GM, and Chrysler-Fiat half-ton sales are boosted by low margin fleet business. Ford, GM, and to a lesser degree Chrysler-Fiat all benefit from economies of scale driven by both their fleet business and their heavy-duty truck lines. The F-150 and the SuperDuty, for example, share components and design. Same goes for GM and Dodge – their half-ton and HD trucks share parts.
These lower costs due to shared parts and design with the heavy duty trucks help make Ford, GM, and Chrysler-Fiat trucks more competitive in the fleet business. Because truck fleet sales are driven by the lowest costs, lower production costs help lock-up fleet sales, which in turn increase economies of scale, which further lowers costs, which further boosts fleet sales. Etc. It’s no wonder that a local Ford fleet manager recently bragged to me that he could get the price on a brand new F-150 down to about $18,000…provided I was willing to buy a few dozen.
3. Toyota isn’t investing in an HD truck anytime soon. The line “it hinders us from being more aggressive and not reaching the volume where we bounce from there” seems like a pretty clear indicator that Toyota’s long-stated plan to build a 3/4 ton Tundra is on hold until sales volumes and market share meet original expectations. Put another way, Inaba’s comment is “until we start selling 200k Tundras per year, we’re not going to be attacking the H.D. market.” This echoes comments I’ve heard from sources.
This last comment is also a bad sign for the future of a diesel Tundra…but I’m not giving up hope.
Anyone else care to analyze these comments?
Filed Under: Tundra News